Italy's Enel Targets $3.8bn with Further Endesa Flotation

Enel to sell up to 22% of Spanish subsidiary in Madrid

Italian utility Enel could raise €3.1bn through a sale of up to 22% of its Spanish subsidiary Endesa, according to the prospectus filed with regulators.

The planned Madrid share sale will help Italy's largest electricity firm, which owns 92% of Endesa, increase its Spanish subsidiary's free float and pare its own debt, reports said.

The maximum share price for the retail placement has been set at €15.535 apiece, valuing Endesa at €20.7bn (£16.2bn, $26bn) and representing a 6% premium to its closing share price of €14.65 on 6 November.

The placement, including a public offering of shares to retail investors, alongside Spanish and international institutional investors, includes an over-allotment option: the joint global coordinators could acquire between 23 million and 30 million Endesa shares.

Nearly 15% of the stock sale will target Spanish retail investors.

Bookbuilding for the offer will open on 13 November and close on 20 November, when the final price will be affixed.

Goldman Sachs, Morgan Stanly and UBS are the joint book-runners.

Banco Santander, BBVA, Credit Suisse and JPMorgan are the joint global coordinators of the deal.

Mediobanca is advising Enel.

The offloaded shares are to begin trading on 27 November.

In a bid to draw investors, Endesa, among the large Spanish electricity firms, has said it will dole out 84.5% of earnings in shareholder dividends in 2015 and 80.6% in 2016.